In contrast to the 3rd pillar, an advance withdrawal for home ownership (WEF advance withdrawal) can be paid back from the 2nd pillar.

Advantages of a repayment

A repayment can have the following advantages:

A repayment can have the following benefits:

  • Tax refund and deferral: The tax paid on the lump-sum payment as part of the early withdrawal can be reclaimed in the event of a repayment. This is particularly interesting for younger people, because even though tax must be paid as part of retirement, the tax can be postponed for years or even decades through repayment. Meanwhile, you can do better things with the money, such as paying into the 3rd pillar on a tax-privileged basis.
  • Voluntary purchases possible again: Once you have repaid all 2nd pillar WEF advance withdrawals, you may make voluntary purchases again and deduct them from your taxable income.
  • Improving insurance coverage: If an early withdrawal leads to poorer death and disability benefits, coverage can be improved if the amount withdrawn in advance is returned to the pension fund.
  • Closing the pension gap: Finally, a repayment can be interesting if you receive a higher pension as a result. However, the same considerations must be made as for a voluntary purchase, because not every payment into the pension fund automatically leads to higher benefits.

The following procedure makes no sense: You repay an early withdrawal shortly before retirement and withdraw the capital a few years later. It is not without reason that the WEF advance withdrawal is one of the instruments of staggered withdrawal. A staggered withdrawal can reduce the tax progression.

Repayment can be made up to the retirement and must amount to a minimum of 10,000 francs. If the portion of the advance withdrawal that has not yet been repaid is less than 10,000 francs, the repayment must be made in one amount.

Do not forget tax reclaim

You have paid tax on the WEF advance withdrawal. You can reclaim this tax as soon as you have repaid the advance withdrawal or part of it to the 2nd pillar. To initiate the process, you will receive a copy of your pension fund’s certificate of repayment (original goes to the Federal Tax Administration).

Finally, you have three years to reclaim the tax. If you do not reclaim the tax within three years of the repayment, your right to reclaim expires. To ensure that you do not lose the right to reclaim, we recommend that you combine repayment and reclaiming in a timely manner.

If you have several open WEF withdrawals, the refund of the paid tax is done as follows: First, the tax is refunded on the first withdrawal, then on the second, and so on. If you pay back only part of an advance withdrawal, you will receive the tax back on a pro rata basis.

Obligation to repay in the event of sale of the residential property

If you sell your residential property, you are forced to repay the early withdrawal to the 2nd pillar. The restriction on sale entered in the land register as part of the early withdrawal ensures compliance with this provision. No sale without repayment.

Exception 1: Transfer to beneficiary under pension law

If you transfer the residential property to a beneficiary under pension law, for example to your life partner, the repayment obligation is suspended. The advance withdrawal does not have to be repaid until your partner also sells the residential property.

Exception 2: Replacement

A period of two years applies for replacement purchases. During this time, the advance withdrawal does not have to be paid back into the 2nd pillar. It can be paid into a vested benefits account after the sale of the previous home and invested in a new home for two years.

Exception 3: Renting after a longer period of self-occupancy

If the apartment or house is first occupied by the owner and later rented out, repayment of the advance withdrawal is not mandatory. However, it is a condition that the rental was not planned from the beginning and that the owner-occupancy was only for a short temporary period, according to a decision of the Federal Supreme Court.

When the entire advance withdrawal into the 2nd pillar has been repaid, you can arrange for the restriction on alienation to be deleted from the land register.

Further questions and answers

Can a WEF advance withdrawal from a pension fund be repaid with vested benefits?

No, this is not possible, not even with vested benefits that you have received, for example, in the event of a divorce or a reduction in your working hours. Repayment must always be made from free funds.

Can a WEF advance withdrawal from a pension fund be repaid with 3a assets?

In principle, it is possible and permitted to transfer 3a assets to the pension fund in order to close gaps in the occupational pension plan (2nd pillar). However, WEF withdrawals cannot be repaid directly by 3rd pillar funds. The reason is that a transfer from the 3rd to the 2nd pillar is tax-neutral. A repayment of a WEF advance withdrawal, on the other hand, is not tax-neutral. The tax paid on the withdrawal can be reclaimed. Accordingly, with a transfer from the 3rd to the 2nd pillar, the capital withdrawal tax paid could be reclaimed, even though no more money is available for personal pension provision overall.

Can a repayment of a WEF advance withdrawal from a pension fund also be made to a vested benefits account?

No, in principle the money must be paid back into the pension fund. However, there are exceptions.

  • If you are planning a replacement purchase after selling your home. In this case, the WEF advance withdrawal can be temporarily deposited in a vested benefits account, but the money must be invested in the new home within two years.
  • If one is not currently affiliated to a pension fund, then one can make a repayment to the vested benefits account.

Must a repayment of an advance withdrawal of vested benefits be made to the same vested benefits foundation?

If you have withdrawn the entire vested benefits account, this is comparable to a balancing. In this case, you can repay the WEF advance withdrawal to another vested benefits account at another vested benefits foundation without further ado.

However, if you have only withdrawn part of a vested benefits account, you must also repay this part in the same place. This is because it is prohibited to split vested benefits accounts.

What you can do if you still want to change providers: You can transfer the remaining amount on the vested benefits account to the new provider and make the repayment to the new provider’s account.

When is repayment no longer possible?

Repayment is no longer possible if an insured event (death or disability) has occurred since the WEF advance withdrawal.